Saudi Arabia: Refund of input VAT to qualified real estate developers under Decision No. 04-08-22

In detail

The decision No. 04-08-22 dated 07/03/1444 AH (corresponding to 03 October 2022) in relation to the recovery of VAT by qualified real estate developers has been issued by ZATCA with reference to the following:

• VAT Implementing Regulations - Article 70 paragraph 14

• Ministerial decision number 1754 issued on 15/04/1442 AH (corresponding to 30 November 2020)

• Rules and Procedures for Recovering Value-Added Tax by Real Estate Developers Qualified for VAT Recovery - Rule No. 5

The summary of the decision issued by ZATCA includes the following:

1. All real estate developers (eligible for refund) whose application was accepted by ZATCA before this decision are allowed to claim refund of input VAT on purchase of goods and services in relation to exempt supply of real estate provided that they satisfy the conditions (First - Third) set forth under the Ministerial Resolution No. (1754) dated 04/15/ 1442 AH.

   Such real estate developers can claim refund of input VAT from the date from which they meet the conditions set forth under the Ministerial Resolution No. (1754) as mentioned above or 4 October 2020 whichever comes later. Such input VAT can be claimed with the refund request of last quarter of calendar year 2022 or with the annual VAT refund request to be filed for calendar year 2022 as the case may be.

2. Real estate developers, who are eligible for refund VAT on supplies of goods or services related to exempt real estate supplies, are allowed to refund input VAT in the event that they are unable to register with ZATCA as qualified real estate developers due to a circumstance beyond their control.

   Such real estate developers may submit a request to ZATCA to allow them to refund VAT for previous periods provided that conditions as set forth under the Ministerial Resolution No. (1754) (First - Third) are satisfied and they can provide the reasons for the delay in submitting the application for registration with ZATCA along with the evidence that this was beyond their control.

3. The Governor of ZATCA is authorized to consider and approve the requests referred to in item (2) of this decision.

4. This decision shall be communicated to whomever is required to implement it, and shall be enforced from the date of its issuance.